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on Labor Markets - Supply, Demand, and Wages |
| By: | Nikolova, Milena |
| Abstract: | A growing body of research in economics shows that workers care about more than just pay, often seeking social status, career mobility, or meaningful work. This chapter introduces the work orientations framework - a concept from psychology - as a unifying lens for understanding these motivations. Work orientations capture individuals' core beliefs about the role of work: earning a living ("paycheck"), achieving recognition and advancement ("career"), or finding fulfillment ("calling"). These orientations are not mutually exclusive, and many people hold a mix that shapes their workplace behavior. Economists have long examined financial incentives, alignment with an organization's mission, and career ambitions, but these strands remain fragmented. Integrating them within the work orientations framework broadens standard economic models, offers a richer view of labor supply and effort, and suggests new priorities for data collection, measurement, and theory development. The chapter reviews current evidence and outlines avenues for future empirical and conceptual research. |
| Keywords: | Work orientations, Job orientation, Career orientation, Calling orientation, Labor economics |
| JEL: | J22 J24 J28 I31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1645 |
| By: | Esslinger, Anna; Pfeil, Katharina; Feld, Lars P. |
| Abstract: | Are the effects of tax aversion on labor supply symmetric? In a real-effort online experiment, participants are exposed to manipulated wages and taxes after first experiencing the same reference wage. We find no significant differences in their productivity; however, we find significant asymmetries in fairness perceptions of the treatments. We find that tax increases are viewed as more unfair than equivalent wage decreases and tax decreases are viewed as more fair than equivalent wage increases. Additionally, the negative effect of tax increases is larger than the positive effect of tax decreases. However, we find little to no evidence that these asymmetric fairness perceptions significantly shape working behavior. |
| Keywords: | Tax Aversion, Loss Aversion, Labor Supply Asymmetry, Online Experiment |
| JEL: | H20 H30 D91 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:aluord:323932 |
| By: | David Deming (Harvard University); Mikko Silliman (Aalto University) |
| Abstract: | This paper synthesizes the economics literature on skills and human capital, with a particular focus on higher-order capacities like social and decision-making skills. We review the empirical evidence on returns to human capital from both a micro and macro perspective, as well as the evidence on returns to human capital investment over the life-cycle. We highlight two key limitations of human capital theory as currently implemented. First, prior work mostly assumes that human capital is one-dimensional and can be measured by education or test scores alone. Second, human capital is typically modeled as augmenting the marginal product of labor with workers being treated as factors of production, just like physical capital. We argue for a new approach that treats workers as agents who decide how to allocate their labor over job tasks. Traditional cognitive skills make workers more productive in any task, while higher-order skills govern workers’ choices of which tasks to perform and whether to work alone or in a team. We illustrate the value of this approach with stylized models that incorporate teamwork and decision-making skills and generate predictions about how returns to skills vary across contexts. |
| Keywords: | education, skills, human capital, labor market returns |
| JEL: | I26 J2 J31 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2520 |
| By: | Landini, Fabio; Lunardon, Davide; Rinaldi, Riccardo; Tredicine, Luigi |
| Abstract: | The need to achieve a safe and just ecological transition is a key target of European policy makers. Green jobs are often presented as key levers to achieve this objective, as they enable the creation of new employment opportunities across a wide spectrum of occupations, including low skill ones. In this paper we investigate if and how these opportunities are seized by one of the most vulnerable segment of the labor force, namely migrants. By relying on detailed administrative data covering more that 12 million contract activations in the Emilia-Romagna Region (Italy) we document that, after controlling for potential confounders, migrants are less likely than natives to find employment in green jobs. Moreover, when they do, they have higher chances to be hired with either a fixed-term or an agency contract. Heterogeneity analysis across industries and occupations reveals that such precarious employment patterns are driven primarily by firm attempts to reduce green costs. These results are rationalized through the lenses of institutional segmentation theory. Related policy implications are discussed. |
| Keywords: | Green Jobs, Migrant Workers, Precarious Employment, Institutional Segmentation |
| JEL: | Q52 J24 J15 J41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1636 |
| By: | Landini, Fabio; Lunardon, Davide; Marzucchi, Alberto |
| Abstract: | We investigate the perceived meaning of green jobs. Theoretically, we extend the standard meaningful work framework, by introducing a social esteem component, which depends on both the green content of occupations and the socio-political awareness of environmental issues. To identify green jobs, we employ a task-based indicator based on ESCO data, which is then merged with individual-level data from the 2015 and 2021 waves of the European Working Conditions Survey. Moreover, we proxy the degree of environmental consciousness at the country level through the Environmental Policy Stringency index from the OECD. In line with our theoretical framework, we find that workers' perceptions of meaningful work increase with the green content of their occupation and are amplified in countries exhibiting higher levels of environmental consciousness. These results highlight the role of social esteem, derived from the contribution to what is considered a socially valuable objective (i.e. the fight against climate change), in shaping the experience of meaningful work. To allow a more 'causal' interpretation of the results, we employ an instrumental variable approach which corroborates the main findings. |
| Keywords: | Meaningful Work, Green Jobs, Social Esteem, Green Transition, EWCS |
| JEL: | J24 J28 O31 O33 Q20 Q40 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1639 |
| By: | Andreas Ferrara; Christian Dippel; Stephan Heblich |
| Abstract: | This paper presents new evidence on the critical role of lower-level organizational leaders. Unlike top managers, frontline leaders are essential for implementing organizational strategies by maintaining team cohesion when shirking is profitable for workers. We study this in the context of the Union Army during the U.S. Civil War, using data on 2.2 million soldiers and tracking captains and their 100-soldier companies at weekly frequency throughout the conflict. We estimate leader fixed effects during non-combat weeks to measure leadership quality in a leader value-added framework. We validate this measure by showing that captains were not assigned based on prior unit performance or observable pre-war characteristics. High-quality leaders earned more after the war, but not before, and were more frequently recognized as good leaders in their postwar biographies. Daily event-study estimates around major battles show that better captains significantly reduced desertions in combat. Exploiting quasi-random leader turnover, we find evidence that this effect is causal. Using digitized battle maps, we rule out risk aversion as a mechanism and find instead that better leaders had higher mortality rates, consistent with a leading-by-example explanation. We also document modest learning-by-doing effects. These findings highlight the often-overlooked importance of frontline leadership, where direct supervision and interpersonal influence are strongest. |
| JEL: | D9 J24 M12 N21 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34057 |
| By: | Lucía Ramírez Leira (CEDLAS-IIE-FCE-UNLP); Carlo Lombardo (CEDLAS-IIE-FCE-UNLP & Cornell University); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET) |
| Abstract: | In Argentina, the national minimum wage (NMW) coexists with sectoral wage floors (WF) established through collective bargaining agreements (CBA). These WFs exceed the NMW for most registered workers, rendering the minimum wage largely ineffective. Using novel data on union-negotiated wages combined with administrative records, this paper analyzes the impact of WFs set in CBAs on employment, wages, and wage inequality among formal workers. The analysis is conducted at both the industry and individual levels, utilizing a fixed-effects model by year and sector and a linear probability model based on individual worker trajectories. Results indicate that CBAs reduce overall wage inequality by decreasing inequality at the upper end of the distribution without affecting the lower end. No significant employment effects are found, except for a negative impact in sectors with a higher proportion of small firms (MSMEs). However, at the worker level, CBAs reduce the probability of remaining employed for work- ers near the wage floors, with more negative effects observed in MSMEs. Finally, CBAs’ positive effect on wage increases and negative effects on employment are more pronounced in unfavorable macroeconomic conditions. |
| JEL: | J22 J31 J38 K31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:dls:wpaper:0353 |
| By: | Fabian Stephany; Alejandra Mira; Matthew Bone |
| Abstract: | This study investigates the non-monetary rewards associated with artificial intelligence (AI) skills in the U.S. labour market. Using a dataset of approximately ten million online job vacancies from 2018 to 2024, we identify AI roles-positions requiring at least one AI-related skill-and examine the extent to which these roles offer non-monetary benefits such as tuition assistance, paid leave, health and well-being perks, parental leave, workplace culture enhancements, and remote work options. While previous research has documented substantial wage premiums for AI-related roles due to growing demand and limited talent supply, our study asks whether this demand also translates into enhanced non-monetary compensation. We find that AI roles are significantly more likely to offer such perks, even after controlling for education requirements, industry, and occupation type. It is twice as likely for an AI role to offer parental leave and almost three times more likely to provide remote working options. Moreover, the highest-paying AI roles tend to bundle these benefits, suggesting a compound premium where salary increases coincide with expanded non-monetary rewards. AI roles offering parental leave or health benefits show salaries that are, on average, 12% to 20% higher than AI roles without this benefit. This pattern is particularly pronounced in years and occupations experiencing the highest AI-related demand, pointing to a demand-driven dynamic. Our findings underscore the strong pull of AI talent in the labor market and challenge narratives of technological displacement, highlighting instead how employers compete for scarce talent through both financial and non-financial incentives. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.20410 |
| By: | Juan Dolado (Universidad Carlos III de Madrid); Alvaro Janez (Stockholm School of Economics); Felix Wellschmied (Universidad Carlos III de Madrid) |
| Abstract: | Online food delivery platforms typically operate through a controversial business model that relies on subcontracting self-employed workers, known as riders. Using a search and matching model, we quantify the labor-market effects of the Spanish Riders’ Law in 2021 that establishes the presumption of dependent employment for riders. Riders with heterogeneous preferences for leisure trade off work flexibility and easier employability as self-employed against enjoying higher wages as employees. Our main finding is that the reform succeeded in increasing the share of employees but failed to fully absorb the large outflows from self-employment and decreased riders’ wages, resulting in welfare losses. However, complementing the reform with a payroll tax cut for platforms hiring employees preserves employment levels and increases substantially riders’ welfare. |
| Keywords: | Riders, Food delivery platforms, Self-employed, Employees |
| JEL: | J21 J60 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2527 |
| By: | Jirjahn, Uwe; Mohrenweiser, Jens |
| Abstract: | Since the emergence of personnel economics, economists have been increasingly aware that the management practices used by firms are an important determinant of productivity. However, it is an open question of whether the impact of management practices on the productivity of firms depends on workplace health promotion activities (alternatively called workplace wellness programs). Using a widely recognized management index developed by Bloom and Van Reenen (2007), this study provides evidence that workplace health promotion moderates the link between management practices and productivity. Our panel data estimates show that the positive impact of management practices on productivity is stronger if a firm engages in workplace health promotion. This finding fits the notion that workplace health promotion mitigates adverse side effects of management practices on employees' health. However, our estimates also provide evidence of a negative direct influence of workplace promotion on productivity. The positive moderating influence of workplace health promotion only dominates the negative direct influence if a firm uses Bloom and Van Reenen's management practices (targets, monitoring and incentives) at a high intensity. |
| Keywords: | Targets, Monitoring, Incentives, Employee Health, Workplace Wellness Programs, Firm Performance |
| JEL: | I10 J24 J28 J81 M50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1643 |
| By: | Matias Giaccobasso (VATT Institute for Economic Research, Finnish Center of Excellence in Tax Systems Research); Marcelo Bergolo (IECON -Universidad de La Republica (UDELAR) and IZA); Gabriel Burdin (University of Siena and IZA); Mauricio De Rosa (IECON-UDELAR); Martin Leites (IECON-UDELAR); Horacio Rueda (U. of Houston and IECON-UDELAR) |
| Abstract: | This paper presents new evidence on how top income earners respond to changes in the personal labor income tax schedule, uncovering both own-and cross-tax base responses within a unified framework. For identification, we exploit a 2012 tax reform in Uruguay that generated quasi-random variation in top marginal rates within the top 1% of the labor income distribution. Our empirical approach relies on a difference-in-differences identification strategy and administrative records linked at the individual level across multiple tax bases. We estimate an own-tax base intensive margin elasticity of 0.77 and extensive margin semi-elasticity of 2.64. Extensive margin responses are mostly driven by taxpayers shifting from the personal labor income tax base toward corporate income or capital income tax bases (semi-elasticities of -0.79 and -0.75, respectively). Our preferred estimates suggest that the reform was effective in increasing tax revenues, with efficiency costs representing 27% of the projected increase. However, it had limited impact on inequality, most likely due to its narrow scope and income shifting toward tax bases with lower and flat rates. Overall, our results indicate that policy efforts aiming to reduce inequality by increasing top marginal tax rates should also focus on limiting income shifting opportunities to strengthen their redistributive effects. |
| Keywords: | Income taxation, top income earners, tax reform, reported income supply, income-shifting |
| JEL: | H21 H24 H30 J22 O23 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:34 |
| By: | Jeffrey Clemens; Olivia Edwards; Jonathan Meer |
| Abstract: | We analyze the effect of California's $20 fast food minimum wage, which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector. In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California's fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024. Adjusting for pre-AB 1228 trends increases this differential decline to 3.2 percent, while netting out the equivalent employment changes in non-minimum-wage-intensive industries further increases the decline. Our median estimate translates into a loss of 18, 000 jobs in California's fast food sector relative to the counterfactual. |
| JEL: | J08 J20 J38 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34033 |
| By: | Cloé Garnache; Elisabeth Isaksen; Maria Nareklishvili |
| Abstract: | The transition to a low-carbon economy requires a contraction of fossil fuel sectors, raising questions about the labor market costs of reallocation. We study the 2014 oil price shock as a natural experiment to examine the contraction of Norway’s oil industry. Using matched employer–employee data, we estimate long-run effects on earnings and employment using two complementary approaches. A difference-in-differences design shows moderate losses for all oil workers, while an event study reveals substantially larger and more persistent losses among displaced workers—up to 10% in earnings and 5% in employment nine years after displacement, especially for those with lower educational attainment. Although few displaced workers transition into green jobs, they are equally likely to enter green and brown (non-oil) sectors when accounting for the size of each destination sector. Earnings losses are larger for those entering green jobs rather than brown (non-oil) jobs, but smaller than for those entering other sectors. Decomposition results indicate that differences in establishment wage premiums—rather than skill mismatch—explain most of the observed gaps. |
| Keywords: | green transition, oil industry, job displacement, distributional effects, establishment wage premium, skills mismatch |
| JEL: | Q32 Q52 J24 J63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12057 |
| By: | Adamopoulou, Effrosyni; Hannusch, Anne; Kopecky, Karen A.; Obermeier, Tim |
| Abstract: | Why do US college-educated couples with children marry at higher rates than those without a college degree? We argue that investing in children is more valuable for college-educated couples, who are more likely to send their children to college. Marriage, which entails lower separation risk and more equal asset division if separation does occur, provides insurance to the lower-earning spouse, which facilitates child investment. Using an OLG model of marriage, cohabitation, wealth accumulation, and educational investments where college completion is risky, we find that insurance through marriage is particularly important when investing in children is costly and college costs are high. |
| Keywords: | cohabitation, marriage, child development, time and money investments, human capital accumulation, college costs |
| JEL: | D15 E24 J12 J22 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:321867 |
| By: | Gallie, Duncan; Zhou, Ying |
| Abstract: | Since the mid-20th Century, theory and research in sociology on workers' responses to their experience of work can be broadly divided into three overlapping phases. The immediate post-war decades from the late 1940 to the 1970s saw the pervasive influence of an 'essentialist' conception of the meaningfulness of work. From the 1960s this was challenged by a 'liberal' view that rejected the idea that there was an inherent human nature in favour of an emphasis on the importance of individual value choice. It argued that a growth of instrumentalism in work orientations would make job quality decreasingly relevant to the meaning of work. Then in the first decades of the 21st Century, there was a revival of theory and research on meaningfulness, premised on the notion of fundamental human needs, but emphasising at the same time broader societal needs. These different perspectives have given a very different importance to the role of technology as a determinant of the meaning of work. Technological change was at the core of the essentialist arguments, it was marginalised by the liberal arguments and has become once more an important preoccupation of more recent work on meaningfulness. |
| Keywords: | meaningfulness, alienation, job quality, skills, control, technology |
| JEL: | J24 J28 J81 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1652 |
| By: | Golo Henseke; Rhys Davies; Alan Felstead; Duncan Gallie; Francis Green; Ying Zhou |
| Abstract: | We introduce the Generative AI Susceptibility Index (GAISI), a task-based measure of UK job exposure to large language models (LLMs), such as ChatGPT. GAISI is derived from probabilistic task ratings by LLMs and linked to worker-reported task data from the Skills and Employment Surveys. It reflects the share of job activities where an LLM or LLM-powered system can reduce task completion time by at least 25 per cent beyond existing productivity tools. The index demonstrates high reliability, strong alignment with AI capabilities, and superior predictive power compared to existing exposure measures. By 2023-24, nearly all UK jobs exhibited some exposure, yet only a minority were heavily affected. Aggregate exposure has risen since 2017, primarily due to occupational shifts rather than changes in task profiles. The price premium for AI-exposed tasks declined relative to 2017, measuring approximately 11 per cent lower in 2023-24. Job postings in high-exposure roles also fell by 6.5 per cent following the release of ChatGPT. GAISI offers a robust framework for assessing generative AI's impact on work, providing early evidence that displacement effects may already outweigh productivity gains. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.22748 |
| By: | Guido Friebel (University of Frankfurt); Michael Raith (Rochester University) |
| Abstract: | Managers (“bosses†) are central to the development and allocation of human capital in firms because they train employees and learn about their abilities. While a multi-divisional firm wants to allocate workers to wherever they are most productive, bosses who are rewarded for their units’ performance prefer to hold on to good employees, and the prospect of losing good people weakens the incentives to train them. We derive the optimal incentive contract for bosses that enables a firm to change from “silos†with only upward mobility to a “lattice†with cross-divisional mobility. Compared to silos, a lattice achieves a more efficient allocation of people to positions, but also entails agency costs that may exceed the benefits. We suggest empirical predictions about when silos or a lattice are optimal, and relate our model and its results to examples and evidence. |
| Keywords: | middle managers, internal labor markets, human capital, training, talent hoarding, multi-divisional firm, intra-firm mobility |
| JEL: | D2 D8 L2 M5 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2531 |
| By: | Balbuzanov, Ivan (Department of Economics, University of Melbourne); Gars, Jared (Food and Resource Economics Department, University of Florida); Stalinski, Mateusz (University of Warwick and CAGE); Tjernström, Emilia (Macquarie University) |
| Abstract: | Digital platforms increasingly compensate content creators based on engagement metrics, yet the effects of these incentives remain poorly understood. We conducted a field experiment with a Kenyan news outlet to study how high-intensity performance incentives affect content production, quality, and journalist well-being in digital media. We randomly assigned writers to either pay-per-click (PPC) or piece-rate contracts. The PPC contract tripled per-article pageviews and increased daily pageviews by 107%, but reduced the number of published articles by 74%. While PPC writers earned more per article, their overall earnings fell, lowering the firm’s wage bill and increasing profits. However, these gains came at a cost: PPC writers shifted content production away from local news and towards attention-grabbing political stories. PPC writers also used less positive language in both headlines and article bodies. Our results show that engagement-based pay boosts reader traffic but caution that this may come at the cost of compromised coverage diversity, local news provision, and journalist well-being. |
| Keywords: | performance pay, labor productivity, media engagement, field experiment JEL Classification: C93, J24, J33, L82, M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:763 |
| By: | Adam Bloomfield; Lucas Goodman; Shanthi Ramnath; Sita Slavov |
| Abstract: | In recent years, policy makers have adopted many measures to incentivize the establishment of employer-sponsored retirement plans (ESRPs). One such measure – implemented in the early 2000s and made more generous in recent years – allows smaller firms that establish an ESRP to claim a tax credit to offset part of their costs during the initial years. We examine firm take-up of this credit. We find that only 1 percent (pre-policy expansion) to 5.5 percent (post-policy expansion) of apparently eligible firms claim the credit. We document heterogeneity in credit take-up rates by industry, firm owner education, and use of tax preparation services. We also document evidence of “tax preparer learning, ” whereby take-up among a tax preparer’s clients increases after that preparer files their first credit. Finally, we document that most firms only claim the credit for one year despite being eligible to do so for up to three years. |
| JEL: | H32 J32 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34043 |
| By: | Francesca Barigozzi; Chiara Canta; Helmuth Cremer |
| Abstract: | This paper studies how firms’ ownership choices and workers’ intrinsic motivation jointly shape service quality and market outcomes in labor-intensive, mission-driven sectors. Two organizations first choose whether to operate as standard for-profit or as mission-oriented firms, and then compete in both the labor and the user markets. Mission-oriented firms have higher unit costs but attract better-motivated workers. Service quality is endogenously determined through the sorting of intrinsically motivated workers and depends on the firm's ownership type. We show that all market structures - standard, mission-oriented, or mixed - can arise in equilibrium, and that mixed structures can be Pareto superior by efficiently allocating the most motivated workers to the mission-oriented firm while preserving the cost advantage of the other firm. While equilibrium outcomes generally diverge from the social optimum due to externalities and lack of coordination, they are both driven by the trade-off between cost-efficiency and motivation. The model helps explain the coexistence of heterogeneous ownership structures observed in some sectors - such as the nursing homes sector - and identifies conditions under which such diversity is welfare-enhancing. |
| Keywords: | mission-driven sectors, mission-oriented firms, workers' motivation, endogenous market structure, welfare |
| JEL: | J21 L13 L31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12011 |
| By: | Kulshreshtha, Shobhit; Bhattacharya, Leena; Ayyagari, Padmaja |
| Abstract: | Previous research, focusing primarily on high income countries, has linked later sunsets to sleep deficits and worse health outcomes. These results might not generalize to low- and middle- income countries, which have different socioeconomic, cultural, and environmental conditions. Using data from the 2015-16 and 2019-21 waves of India's Demographic and Health Surveys (DHS) and exploiting within-district variation in annual average sunset times, we estimate the causal impact of later sunsets on the long-term health outcomes of individuals. We find that later sunsets leads to a lower prevalence of anemia, diabetes, and thyroid disorders and an improvement in the overall health index. To explore mechanisms, we analyze variation in time allocation due to a later sunset time using the 2019 Time Use Survey. We find that individuals experiencing later sunsets sleep better and exercise more, but do not change their sedentary leisure activities. Additionally, they consume healthier food and increase labor supply. These lifestyle changes may explain the health improvements associated with delayed sunsets in India. |
| Keywords: | health, sunset time, time use, lifestyle, fixed effects |
| JEL: | J22 I12 I14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1648 |
| By: | Rémi Avignon; Claire Chambolle; Etienne Guigue; Hugo Molina |
| Abstract: | This article bridges monopoly, monopsony, and countervailing power theories to analyze their welfare implications in a vertical supply chain. We develop a bilateral monopoly model with bargaining that accommodates upstream monopsony and downstream monopoly power. In equilibrium, the ‘‘short-side rule'' applies: the quantity exchanged is determined by the firm willing to trade less. Welfare is maximized when each firm's bargaining power exactly countervails the other's market power. Otherwise, double marginalization arises in the form of double markdownization under excessive downstream bargaining power, or double markupization under excessive upstream bargaining power. We offer novel insights for price regulation and competition policy. |
| Keywords: | markups, markdowns, bargaining, countervailing buyer power, monopsony power, bilateral monopoly |
| JEL: | C78 D42 J42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12026 |
| By: | Christopher R. Bollinger; Charles Hokayem; James P. Ziliak |
| Abstract: | Using the Current Population Survey Annual Social and Economic Supplement matched to Social Security Administration Detailed Earnings Records, we link observations across consecutive years to investigate a relationship between item nonresponse and measurement error in the earnings questions. Linking individuals across consecutive years allows us to observe switching from response to nonresponse and vice versa. We estimate OLS, IV, and finite mixture models that allow for various assumptions separately for men and women. We find that those who respond in both years of the survey exhibit less measurement error than those who respond in one year. Our findings suggest a trade-off between survey response and data quality that should be considered by survey designers, data collectors, and data users. |
| Keywords: | Earnings, survey response, Current Population Survey |
| JEL: | C18 J31 C21 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-48 |
| By: | Akifumi Kusano (Graduate School of Economics, Waseda University; Waseda Institute of Social and Human Capital Studies (WISH), Tokyo, Japan); Haruko Noguchi (Faculty of School of Political Science and Economics, Tokyo, Japan; WISH, Tokyo, Japan); Yichen Shen (Graduate School of Health Innovation, Kanagawa University of Human Services, Kawasaki, Kanagawa, Japan; WISH, Tokyo, Japan) |
| Abstract: | This study analyzes the effect of a partner’s stroke on labor market, informal caregiving, and mental health outcomes in Japan. Using the Longitudinal Survey of Middle-aged and Elderly Persons and a staggered difference-in-differences, we show that males’ labor supply and informal caring were not affected by partner’s stroke, but female’s informal caring and hours of care were affected by partner’s stroke. Moreover, our research shows that females change the subject of informal caring, and female’s mental health worsens after their partner experiences a stroke. We interpret this result as females face time constraints between hours worked and hours of care, leading to worsening females’ mental health. |
| Keywords: | Stroke, added worker effect, informal care, mental health, labor supply |
| JEL: | I10 J22 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2519 |
| By: | Biagio Bossone |
| Abstract: | Drawing on Keynes’s concept of Marginal Efficiency of Capital (MEC), this article introduces the Marginal Efficiency of Labor (MEL) as an expectations-based valuation metric for understanding labor demand under uncertainty. MEL is defined as the internal rate of return on labor investment, reflecting firms’ expectations about the realizable monetary value of labor’s output relative to its full cost. Unlike the marginal product of labor (MPL), MEL treats labor as an intertemporal asset and incorporates demand-side constraints via an expected realizability factor, thereby endogenizing firms’ hiring decisions to future sales prospects. To make MEL operational, the article derives a Tobin-style q for labor—a forward-looking ratio that expresses the profitability of hiring labor relative to its cost, mirroring the investment logic used for capital. The article formally develops MEL, compares it with classical labor demand, and shows how it explains persistent underemployment equilibria even under real wage flexibility. MEL offers a testable empirical agenda and a structural foundation for modeling hiring behavior in modern Keynesian macroeconomics. |
| Keywords: | Effective demand; Labor supply and demand; Marginal product of capital and labor; Realizability factor; Tobin’s q for labor |
| JEL: | D21 E22 E24 E32 J23 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2518 |
| By: | Simon Luechinger; Mark Schelker; Lukas Schmid |
| Abstract: | We document an overrepresentation of politicians on corporate boards using data for Swiss federal legislators in 1931-2015. However, a close-election regression discontinuity design shows that electoral success explains at most a small part of this overrepresentation. We find small and mostly statistically insignificant causal effects on the probability of having at least one directorship and no effect on the number of directorships. Our results imply that the prevalence of politicians on corporate boards stems from a positive selection of talented individuals in both business and politics, rather than firms hiring politicians to gain political access. |
| Keywords: | political connections, politicians, corporate directors, regression discontinuity design |
| JEL: | D72 D73 J45 H11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12019 |
| By: | Popov, Alexander; Pestova, Anna |
| Abstract: | College enrolment typically rises during recessions. This paper demonstrates that housing wealth destruction dampened this countercyclical effect in areas most affected by the U.S. housing bust of 2008-2011. By combining household data with a mortgage credit register and housing price data, we reveal that negative shocks to housing wealth significantly reduced college enrolment among homeowners relative to renters during this period. Up to 2% of the local college-age population did not pursue college enrolment at the height of the bust due to housing wealth destruction. The negative impact of homeownership on college education persists for a decade, contributing to persistently lower incomes among homeowners in the most affected areas. JEL Classification: I24, E32, J24 |
| Keywords: | college enrolment, homeownership, housing boom-bust episodes, housing wealth |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253083 |
| By: | Sanjib Pohit (National Council of Applied Economic Research); Devender Pratap (National Council of Applied Economic Research); Chetana Chaudhuri (National Council of Applied Economic Research) |
| Abstract: | Unlike other countries, economy-wide modelling in India generally has treated the Indian nation as one entity even though one recognises that the states/regions differ significantly in respect of their resource base and factor endowments. Of course, a few models at the state level exist. However, these models do not capture the transmission channels from the rest of India since these types of models treat the rest of India as merely a balancing mechanism. A few of the existing research studies for India using a Computable General Equilibrium model use a top-down approach to analyse state-level issues. A major drawback of this approach is the lack of consideration for region-specific price effects, for which the effect of state-sponsored programmes or imperfect factor mobility or disparities across regions cannot be captured in these models. Our study is the first attempt to develop a bottom-up model--TERM (The Enormous Regional Model)-for India. The model is utilised to understand the implications of a hypothetical drought in a region (South India) and how the effect transmits to the rest of India, through a 52 commodity sector TERM model for 7 regions in India encompassing 31 states and Union Territories. Each region within the model has its own input–output database and agricultural product mix, and the simulation in this static TERM model depicts short-run effects. The study shows that despite being limited to some states in South India, the drought is likely to have a moderate impact on the Indian economy. Both GDP and employment are going to be affected at the national level, and the parameters are affected in several states in India, that are not necessarily situated in the southern region. The interconnectedness of the regions causes reduction in employment and the wage rate, leading to migration of labour and redistribution of investment. |
| Keywords: | The Enormous Regional Model (TERM), bottom-up Computable General Equilibrium model, India, Drought |
| JEL: | C68 J21 R13 |
| Date: | 2025–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:nca:ncaerw:181 |